Tuesday, 12 March 2019

GBP Gets Ready for an Unpredictable Day with Meaningful Vote 2

All eyes are once again focused on the British Pound, with a crunch vote happening today on the deal which Theresa May has secured with the EU parliament.

As news broke on Monday evening that there was now an agreement on the Northern Ireland backstop (which has been the main point of controversy throughout the withdrawal process) the Pound reacted strongly upward.

Since that gain it has fallen back, as nerves kicked in from traders on the direction of GBP should the Prime Minister not get her deal voted through.

GBP has been rallying strong since late last week, and versus the US Dollar it’s sitting around 2019 highs as it awaits the reaction to Parliaments vote.

Other British Pound pairs are looking strong also. GBPJPY is back near highs for the 12 month period, and GBPCHF surpassed 2018 highs – although the visit to higher prices seems to have been a brief one so far.

So we await the outcome of the vote, which according to press will be around 7pm tonight (UK time).

Things are never straightforward in the UK, and the Pound never reacts in a totally predictable manor, so expect some real volatility later across the markets, because this vote could open the path to unexpected outcomes.

from http://www.livecharts.co.uk/livewire/2019/03/gbp-gets-ready-for-an-unpredictable-day-with-meaningful-vote-2/

Wednesday, 16 January 2019

Share Prices Undecided on Direction as Brexit Uncertainty Continues

Major stocks around the globe have been rising since the turn of the year, and share prices in the UK are no different. The FTSE 100 index was roughly 450 points off the December lows at the tail end of last week, when the index price briefly hit 7000 in early trading and fell sharply for the rest of the day.


Investors had renewed appetite for buying stocks as 2019 rolled in, and share prices of most companies have responded. However, they now seem to have stalled as once again Brexit uncertainty looms.

Theresa May’s Government were soundly defeated by an overwhelming majority on the vote for her proposed Brexit deal with the EU. Once again this throws out uncertainty on UK businesses and economy. Uncertainty is a real drag on any market, and Brexit continues to be one of the most uncertain issues the UK has faced in modern times.

Whilst GBP responded to the result with a huge gain, FTSE 100 futures began to retrace. Surprisingly there has been no real crash in share prices, but they do look to be stalling as if they await further developments on how the Prime Minister will approach the defeat with an alternative idea.

European and US stock indexes seem to be holding firm also, which is probably helping the FTSE stay stable. The DAX30 index is currently around 600 points up from its December low.

Micro cap stocks on AIM have also been seeing some spectacular gains. Shares such as EQT, which is up over 100% since December, and INFA, which has also gained around 90% since December. Many other AIM stocks have made good ground, after what can only be described as an awful 2018 for micro caps.

from http://www.livecharts.co.uk/livewire/2019/01/share-prices-undecided-on-direction-as-brexit-uncertainty-continues/

Tuesday, 15 January 2019

Gold Prices – Have We Hit The Resistance?

The strength of Gold prices has remained high over the last 10 days since reaching the resistance at just under $1300. If you look left on a daily chart, you can see this was the area that clearly broke down in June 2018. Gold is fighting against higher prices here, a true battle of bulls versus bears.

One thing of note which Gold traders should observe around this level, is that the US Dollar looks like it could be turning. The US Dollar index is still holding an upward trend, although it has consolidated slightly over the last 30 days. Crucially, it is still above the highs of early last summer, and looks like it could be stalling and looking for a short term change in direction around here.

What does this mean for Gold? In general, because the majority of traders follow Gold prices versus the US Dollar, then strength of the Dollar tends to push Gold down. We can observe the lows in Gold over summer, and into autumn last year as the Dollar index rallied higher.

This could suggest there may be a pull-back in Gold prices over the coming weeks if the Dollar gains more momentum towards the recent highs. It’s inevitable that a strong rally will retrace as traders unwind positions. The key things are; Is a pull-back just a dip, which will rally once again? Or will the next fall signal a short term top?

Many commentators are calling for much higher prices in Gold. Why? Mainly because we seem to be easing off the cycle of rate hikes by the Fed. Comments came in December of the plan for 2 increases during 2019, which may not even happen dependent on economic conditions as this year progresses. If the planned rate hikes are put on hold, Gold could well see much higher prices during 2019.

So all in all, there is probably a good case for any retrace in Gold to be merely a dip. Traders should be watching for where the possible support levels could be if Gold does decide to slide, and watch for the US Dollar to meet some strong resistance.

from http://www.livecharts.co.uk/livewire/2019/01/gold-prices-have-we-hit-the-resistance/

Tuesday, 18 December 2018

Gold and Silver Prices Continue to Creep Higher

Gold and Silver prices continued to push towards their recent highs yesterday, aided by the US Dollar which began to slide further away from the 2018 highs. Gold has been on a run lately, after breaking through the 1230 resistance area following the end of November Non-Farm Payroll report.

Currently the gains in Gold and Silver prices are being supported by a Dollar weakness across the board. Versus the Japanese Yen; USD made most losses, in just two days the price has fallen over $1, although against CAD (which has also been weakening) it remained relatively stable.

Weakness in stocks can often see Gold begin to gain, and currently stocks have been very weak. It’s actually quite surprising that Gold and Silver have not gained more, considering the money that has been pulled out of stocks. Maybe that’s a sign that the stock market is simply correcting (money waiting to buy back in) rather than crashing (money running scared to other investments). I’m sure we will soon know as January and a new year approaches.

For now Gold needs to break, convincingly, above $1250 and hold. As you can see on the chart below $1250 is the last recent high, and also the area in the downtrend that broke down during the early summer slide.


If the US Dollar remains weak into the end of the year then it’s entirely possible we will see that break above. However there is a strong trend-line on the US Dollar index below which is will need to break before and sustained Dollar weakness can occur.

See the neat and tidy upward trend that the US Dollar has been navigating since early 2018?


It will probably take a shift in monetary policy to break this trend. But with Donald Trump at the helm, I am sure there will be news to help swing things around soon enough.

from http://www.livecharts.co.uk/livewire/2018/12/gold-and-silver-prices-continue-to-creep-higher/

Monday, 17 December 2018

FTSE / DAX Still Weak Moving Into End of Year

Shares in the UK and Europe are still languishing near their year lows, as the often strong time of year for the markets arrives, and nearly passes. The FTSE 100 made a clean break of the support in early December, under 6850 and has since not shown any real strength to suggest it will attempt to make back the loss.


FTSE 100 Below Support

Similar patterns are apparent over on the DAX30 index too. Early December saw the German market break down under 11000 and currently looks weak below it.

Why Are Shares So Weak?

There are many reasons that can be attached to the weakness in stocks. We have the uncertainty of Brexit, which I will spare you from more details (I’m sure you are sick of it all by now) and there’s the on-going “trade war” between Donald Trump and China. With China being a huge market for many companies, especially for metal exports, it’s not surprising investors are wary. A further slowdown of China’s economy is the highly likely over the coming quarters, and the markets could be pricing this fact in.

For those in the UK, again Brexit worries are pushing the British Pound back towards the lows of 2016. Every rise is being met by further lows, nobody is in the mood to buy GBP. Which is no surprise given the prospects of volatility that may occur between now and March 2019 when (IF) the UK is set to leave the European Union.

Uncertainty is always a catalyst for lower prices, whichever market it is. There’s a lot of uncertainty right now, in the USA, in the UK, in Europe and also in Asia. The whole thing feels like it’s on a knife edge, waiting for something (anything) to rescue it.

It could go either way. Some bad news could trigger more sell offs (likely). However, some good news which clears uncertainty could see a sharp rise on relief of the situation.

Which way are you placing your bets?

from http://www.livecharts.co.uk/livewire/2018/12/ftse-dax-still-weak-moving-into-end-of-year/

Monday, 5 November 2018

Is Crude Oil Set to Bounce After a Month of Falls?

It’s fair to say that Crude oil and Brent oil prices were under serious pressure for the whole of October. Brent oil retraced around 18% from the high of the 4th October, which helped fuel a wider market sell off.

Brent is now trading around the levels of July and August 2018, which held firm as support after the first half year gains.

From a technical perspective the $70 (ish) level should offer some support in the near term, but investors should be aware that oil prices have risen near 100% in 18 months.

The chart below shows the key level traders will be watching.


We could see a bounce based on news, and there’s plenty of that to digest.

The situation with Iran and Donald Trump seems like it will only snowball further.

Added to that we have sizable increases in production which have helped push prices lower.

OPEC and the U.S have been behind these increasing numbers, in October OPEC switched their oil production to the highest levels seen since 2016, and the EIA published levels for August that showed a considerable month on month increase.

For now, traders are awaiting this weeks numbers. A slowdown in productivity may help Brent and Crude prices stabilise above the August support.

But a breakdown through that area will be a huge signal for the bears to take further control.

It’s all gearing up to be an interesting few weeks in November.

from http://www.livecharts.co.uk/livewire/2018/11/is-crude-oil-set-to-bounce-after-a-month-of-falls/

Wednesday, 17 October 2018

Relief Rally on Share Prices as US and Europe Make Gains

What a difference a few days make. Stock markets began to rebound strongly in early week trading after the horrendous falls last week. Share prices in the UK had been hit hard, but this mini relief rally was also aided by a weaker British Pound.

The British Pound came under pressure on Monday when talk from Brussels emerged that the UK’s proposed border solution for Northern Ireland is not going down well with the EU leaders.

Brexit worries have been putting constant pressure on GBP and each time it seems progress is being made, another wall gets built for the Government to circumnavigate.

While GBP remains weak stocks tend to perform stronger. So unless there is an agreement soon on the Northern Ireland situation then expect share prices to make more gains over the coming weeks.

In the USA however, strong results from global entertainment company Netflix boosted confidence that the recent sell off was overdone. The Dow Jones surged higher by over 500 points.

To top things off the president decided to Tweet about the rally, stating that the market was up.

When the president decides to ramp it up, he certainly does it well!

Whether these gains can hold moving forward remains to be seen, but many are talking about new all-time highs to follow into the new year. If you study the way USA stocks have performed since Donald Trump was voted in, then you’d not bet against that scenario playing out.

from http://www.livecharts.co.uk/livewire/2018/10/relief-rally-on-share-prices-as-us-and-europe-make-gains/